Decision

Previous regulatory judgement: Westmoreland Supported Housing Limited (30 November 2018)

Updated 5 July 2023

Applies to England

RSH Narrative Regulatory Judgement

• Provider: Westmoreland Supported Housing Limited
• Regulatory code: 4772
• Publication date: 30 November 2018
• Governance grade: G3
• Viability grade: V3
• Reason for publication: First assessment
• Regulatory route: Reactive Engagement

This regulatory judgement is the first published assessment of Westmoreland’s governance and financial viability.

The regulator has concluded that it lacks assurance and evidence that Westmoreland is compliant with the governance and viability elements of the Governance and Financial Viability Standard.

The Westmoreland board has not managed the risks to the business effectively and has been unable to provide the regulator with financial information that was based on appropriate and reasonable assumptions. It has provided insufficient evidence that it currently has a deliverable business plan. The organisation is also in a position where it is reliant on continued financial support from a third party while it attempts to restructure its business, to ensure its medium to long term viability. This is clearly not a desirable or sustainable position, nor one that meets the regulator’s standards.

To date the Westmoreland board has provided the regulator with limited evidence of compliance with Health & Safety legislation and obligations and has been unable to provide assurance on the quality of its accommodation.

In addition, the board has failed to ensure its tenancy management is effective prompting intervention from a local authority and the regulator after Westmoreland issued eviction notices to a number of its tenants to enable it to hand back properties rather than carrying out a more managed process. The way the board handled this situation and the subsequent sub-optimal outcome that resulted is a significant contributory factor in the regulator’s conclusion that Westmoreland’s governance arrangements are not effective.

There are inherent conflicts of interest at board level. The chair of Westmoreland is employed in a senior role by the same third party that is providing the cash support, management services and sourcing properties as part of Westmoreland’s growth strategy. The board has yet to provide compelling evidence that appropriate probity policies and arrangements were in place to effectively manage these conflicts. In the absence of evidence, it is reasonable to assume that these arrangements, whilst giving a level of financial support, could be inappropriately advancing the interests of a third party. Their existence also indicates that the board is not managing its affairs with an appropriate degree of independence.

The quality of information supplied to the board is often very poor and significant improvements are required to improve performance reporting and risk management information to ensure effective control and management of the provider’s activities. The regulator has concluded that it therefore has limited assurance that Westmoreland has an appropriate, robust and prudent business planning, risk and control framework in place.

In response to the regulator’s engagement Westmoreland has appointed a new independent board member and in conjunction with the regulator is intending to further strengthen the governance arrangements. With the support of its advisors it also intends to develop a financial and governance improvement action plan which will also aim to address any remaining conflicts of interest and review all of its stock in terms of statutory compliance and repairs.

The Westmoreland board has committed to work with the regulator to address the issues outlined in this Regulatory Judgement. The regulator is actively working with Westmoreland and will closely monitor the delivery of the improvement plan adjusting its strategy accordingly while keeping the use of its intervention powers under review.

Other providers included in the judgement

None

About the provider

Origins

Westmoreland Supported Housing Limited (Westmoreland) is a not-for-profit Registered Provider and company limited by guarantee.

It provides supported housing and works with care providers to deliver accommodation and support for vulnerable adults with complex learning and physical disabilities. Its latest business plan reports it has 1,379 supported housing units.

Registered Entities

Westmoreland is the only registered entity.

Unregistered Entities

There are no unregistered entities.

Geographic Spread and Scale

Westmoreland operates in 107 local authorities nationally.

Staffing and Turnover

According to its latest business plan Westmoreland employed 11 full time equivalent members of staff and had an annual turnover of £23.6 million.

Development

Westmoreland does not develop new housing. Its growth strategy is to acquire properties to rent under long term leases.

About our judgements

Key to Grades

Governance:

• G1 (Compliant): The provider meets our governance requirements.
• G2 (Compliant): The provider meets our governance requirements but needs to improve some aspects of its governance arrangements to support continued compliance.
• G3 (Non-compliant): The provider does not meet our governance requirements. There are issues of serious regulatory concern and in agreement with us the provider is working to improve its position.
• G4 (Non-compliant): The provider does not meet our governance requirements. There are issues of serious regulatory concern and the provider is subject to regulatory intervention or enforcement action.

Viability:

• V1 (Compliant): The provider meets our viability requirements and has the financial capacity to deal with a wide range of adverse scenarios.
• V2 (Compliant): The provider meets our viability requirements. It has the financial capacity to deal with a reasonable range of adverse scenarios but needs to manage material risks to ensure continued compliance.
• V3 (Non-compliant): The provider does not meet our viability requirements. There are issues of serious regulatory concern and, in agreement with us, the provider is working to improve its position.
• V4 (Non-compliant): The provider does not meet our viability requirements. There are issues of serious regulatory concern and the provider is subject to regulatory intervention or enforcement action.

Definitions of Regulatory Processes

In Depth Assessment (IDA): An IDA is a bespoke assessment of a provider’s viability and governance, including its approach to value for money. It involves on-site work and considers in detail a provider’s ability to meet its financial obligations and the effectiveness of its governance structures and processes.

Stability Checks: Based primarily on information supplied through regulatory returns, a Stability Check is an annual review of a provider’s financial position and its latest business plan. The review is focused on determining if there is evidence to indicate a provider’s current judgements merit reconsideration.

Reactive Engagement: Reactive engagement is unplanned work which is triggered by new information or a developing situation which may have implications for a provider’s current regulatory judgement.

Stability Checks and Reactive Engagement: In some cases, we will publish narrative regulatory judgements which combine evidence gained from both Stability Checks and Reactive Engagement.

For further details about these processes, please see ‘Regulating the Standards’.